§ Dr. John A. Cunningham
asked the Secretary of State for Trade and Industry if he will make a statement about the present situation concerning Sealand Hovercraft Ltd.
§ Mr. Chataway
Since January 1971 Sealand Hovercraft Ltd. has occupied a DTI advance factory at Millom. The company was allowed a five-year rent-free period for the factory which it is still enjoying. It also applied for an operational grant. As the company was aware, such grants can only be made following a favourable recommendation from the Local Employment Act Financial Advisory Committee which has to be satisfied about the prospects of viability of the undertaking seeking assistance. The company has not so far been able to satisfy the committee on this, although it has been given every opportunity to establish its case.
Since October 1972 as a result of financial difficulties the company has made a number of requests to the Department 348W for assistance of various kinds. The DTI arranged accelerated payment of a training grant. A prototype investment grant has also been paid. The Department also offered to provide financial assistance under Section 7 of the Industry Act 1972 if it could be demonstrated that the company and the hovercraft it manufactures could have a viable future. The company was unable to satisfy the Department on this question but in December a consortium of businessmen offered to provide funds which, with financial support from DTI, would allow the company's operations to continue to provide employment in Millom.
As the company has stated, the consortium's proposal required arrangements to be made for the existing bank overdraft to be paid off by the current shareholders, who are the directors of Sealand. The additional funds being provided could then be used to pay other creditors and for future operations. The directors of Sealand now state that they are unable to clear the debt to their bank and thus the consortium has not been able to make progress with its proposal.
The Department remains ready to consider financial support for any proposal, whether from the consortium or from other interests, which seems likely to ensure a viable future for production at Millom and to benefit the employment position in the area.